A steam-assisted gravity drainage site at Cenovus Energy’s Christina Lake oilsands facility is shown southeast of Fort McMurray, Alberta, on Wednesday, April 24, 2024. (Photo: Amber Bracken / The Canadian Press)
Cenovus Energy Inc. saw its shares soar over 9% on Thursday after announcing stronger-than-expected first-quarter earnings and a bigger dividend payout. The Calgary-based oil producer reassured investors that it's in a solid position even if oil prices were to drop significantly from current levels.
Cenovus stock closed at $17.78 on the Toronto Stock Exchange, a jump of 9.1%. This rise followed the release of its Q1 financial results, showing earnings of $859 million, or 47 cents per share. Though this was lower than the $1.18 billion, or 62 cents per share, it earned in the same period last year, it still beat analysts' expectations. Market analysts had estimated earnings of 37 cents per share, according to data from LSEG.
Revenue for the quarter was also slightly higher, hitting $13.30 billion compared to $13.06 billion a year ago. The company’s total oil production averaged 818,900 barrels per day, up from 800,900 barrels daily during the same time last year.
In a move to reward investors, Cenovus raised its quarterly dividend by two cents, bringing it to 20 cents per share. During the first three months of 2025, the company paid out $333 million in dividends and repurchased $62 million of its own shares. Another $178 million in buybacks were made between the end of March and May 5.
Chief Financial Officer Kam Sandhar said the company sees strong value in its shares, especially as its major capital projects near completion. With lower capital investment ahead, Cenovus is looking further to return value to shareholders through continued share buybacks while keeping its financial position stable.
CEO Jon McKenzie echoed that sentiment, stressing that the company is carefully balancing its spending and returns. He stated that Cenovus is in a good place to take advantage of its current share value without risking its financial strength.
“You have to be careful not to get stuck in rigid thinking,” McKenzie said. “When there’s a clear opportunity, like our current share price, we need to act — especially with one of the strongest balance sheets in the industry.”
The company also assured investors that it can keep paying dividends and running operations even if oil prices fall to US$45 per barrel. Recently, West Texas Intermediate (WTI), the key U.S. oil benchmark, has hovered around US$60 — about $10 below what it was six months ago.
McKenzie noted that the company’s growth plans are on track, with minimal disruption to operations. He emphasized that tight financial control and a push to cut costs are helping the company stay strong through market ups and downs.
Cenovus also reported that most of the scheduled maintenance at its oilsands facilities and U.S. refineries should be completed by mid-2025. The company expects to return to regular production levels in the second half of the year.
“With major work nearly done and output rising, we’re on course for a strong finish in 2025 and a solid start to 2026,” McKenzie said.
